Solve the question. Discuss and explain with justification for the answer

68 According to Modigliani and Miller's 1963 'with tax' model, interest costs are cheaper for a company to finance than dividend costs? Select TWO reasons why from the following list. A Dividends are paid out of post-tax earnings B Debt is secured on specific assets C Interest returns are guaranteed D Dividends can be reduced if company performance is weak E Lower transaction costs